But while the Great Lakes State might not necessarily be the belle of the real estate ball, it might just be a bellwether. In some ways, Michigan can function like a curved mirror in which the contours of the national real estate market can be viewed in new and different ways. And if we turn that mirror just the right way, we might even be able to get a look at what is around the next corner.

We are in the midst of a national recovery. How is this trend manifesting in Michigan—and what might that mean for the national market going forward?
With low interest rates contributing to subpar yields from many other investment categories, liquidity is flooding into real estate. As a result, the overseas capital that is always present in hot international markets like New York City and Miami is now beginning to flow into states like Michigan and Ohio. Asian investors have been especially active in Detroit recently, as we saw with the purchases of the former Detroit Free Press and David Stott buildings. Shanghai-based DDI Group spent $13.6 million for the properties, outbidding local investors and emphatically announcing the arrival of significant overseas monies on the shores of the Detroit River.

The other phenomenon helping to fuel additional real estate investment from abroad is the federal EB-5 Visa Program, which essentially offers a pay-for-play green card opportunity for overseas investors willing to invest $500,000. The Hudson Yards project in Manhattan was funded in part by an EB-5 contribution, and the visa program has also helped to fund significant hotel development and acquisition around the country. While this has been more common in cities like New York and San Francisco, it is a significant development that we are now seeing this trend emerge across the Midwest.

What areas in Michigan remain weak despite the recovery?
While the state's industrial market is red hot, with booming automotive suppliers needing more and more space in a market that has seen no real construction in years, the flip side of the coin is the Troy, MI, B/C office market, which is seeing high vacancy rates. That dichotomy is reflected nationally, where seemingly attractive investment locations like New Jersey and suburban Boston and suburban Chicago are actually performing poorly right now.

The truth is that no matter what market you are in, you need good local advice. There are no “can't miss” investment opportunities. Variability within the Michigan real estate market makes that point very clear.

What else have you experienced in Michigan that applies nationally?
Another lesson from Michigan is the need to look at property segments very carefully. Just because capital is available and interest rates are low does not mean throw caution to the wind—there are still segments where investors need to be really careful. Contrary to popular belief, location is not everything. Online giants like Amazon have fundamentally changed the retail game, and big box retail centers are an increasingly problematic investment in any market. Michigan has also given us high-profile examples of another segment—regional malls—that should be approached with caution nationally due to high variability and uncertainty. Summit Place Mall in Waterford Township, MI, is virtually boarded up now, while, just twelve miles away, the Somerset Collection Mall in Troy is booming.

As alluded to above, the office market is a soft spot in Michigan. It is also a potential problem area nationally. Office is highly segmented: you cannot just jump into a market and assume it will work out. There are opportunities available, however. In Southeast Michigan, the I-275 corridor near the airport in Livonia has seen a dramatic rise in office rate—due to a quality location and an abundance of good housing stock. Bloomfield and Birmingham are also hot, mirroring the national trend of stronger economic performance leading successful companies to fight for quality space in a select few “hot” cities that offer the best live, work and play potential for both executives and their employees.

What do investors need to do to ensure that we do not repeat past mistakes?
Good underwriting and accurate appraisals will be keys going forward, and close attention should be paid to lease rollover risk and rental rates. Due caution is also warranted for CMBS loans that pool investors' monies for multiple properties: one bad apple can spoil the barrel. While balloon notes coming due in 2016/2017 is a concern, refinancing will likely mitigate that impact if interest rates stay low. I am encouraged that problem loans are dropping out and we are seeing fewerlender properties hit the market. That said, it would be a mistake to be a “collector.” Now is actually an opportune time to sell. Do not wait for next down cycle: consider cashing in on your profit and operating from a position of strategic strength—an approach that makes sense not only in Michigan, but around the country.